Singapore – The rise of experiential retail integrated with artificial intelligence (AI) in omnichannel setups is among the key trends shaping Southeast Asia (SEA), according to a report from online fashion retailer Zalora.
Zalora’s report draws insights from the 2024 shopping trends to guide brands’ decisions and strategies in SEA.
While global economic issues, inflation, and geopolitical concerns continue to influence consumer spending, the report sees resilience in SEA with a diversified economy, strong domestic consumption, and regional trade integration.
The role of AI remains a significant factor shaping the future of retail as it is integrated with experience. With more brands leveraging AI and social media in their strategies, consumers see more shoppable content that keeps them engaged.
Consumers in SEA are also becoming more immersed in hybrid shopping experiences, blending online and offline channels. Responding to this trend, retailers now offer shopping journeys that integrate technology while creating physical experiences.
According to the report, nearly 50% of retailers in the region are expecting a shift from online spending to physical shopping, with 42% seeing the foot traffic to return to its pre-pandemic levels.
Additionally, consumers are becoming more conscious of environmental issues, building a preference for sustainable choices.
The growing middle class is also contributing to current trends, with the rising demand for beauty and wellness products, luxury brands, and ‘buy now, pay later’ (BNPL) services.
The luxury retail sector in SEA remains resilient, with more consumers becoming inclined to spend on luxury items and more people embracing the market. 50% of luxury customers are Baby Boomers, while 30.8% are millennials.
Meanwhile, middle class consumers are also turning to flexible payment options, with BNPL increasingly being used in the luxury sector, democratising high-end products.
The report also underscores the democratisation of the sports industry, with smaller brands emerging to gain market share, competing against major players’ dominance.
